Correlation Between Cass Information and FORWARD AIR
Can any of the company-specific risk be diversified away by investing in both Cass Information and FORWARD AIR at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cass Information and FORWARD AIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cass Information Systems and FORWARD AIR P, you can compare the effects of market volatilities on Cass Information and FORWARD AIR and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cass Information with a short position of FORWARD AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cass Information and FORWARD AIR.
Diversification Opportunities for Cass Information and FORWARD AIR
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cass and FORWARD is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Cass Information Systems and FORWARD AIR P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FORWARD AIR P and Cass Information is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cass Information Systems are associated (or correlated) with FORWARD AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FORWARD AIR P has no effect on the direction of Cass Information i.e., Cass Information and FORWARD AIR go up and down completely randomly.
Pair Corralation between Cass Information and FORWARD AIR
Assuming the 90 days horizon Cass Information is expected to generate 1.07 times less return on investment than FORWARD AIR. But when comparing it to its historical volatility, Cass Information Systems is 2.54 times less risky than FORWARD AIR. It trades about 0.11 of its potential returns per unit of risk. FORWARD AIR P is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,940 in FORWARD AIR P on September 12, 2024 and sell it today you would earn a total of 240.00 from holding FORWARD AIR P or generate 8.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cass Information Systems vs. FORWARD AIR P
Performance |
| Timeline |
| Cass Information Systems |
| FORWARD AIR P |
Cass Information and FORWARD AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cass Information and FORWARD AIR
The main advantage of trading using opposite Cass Information and FORWARD AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cass Information position performs unexpectedly, FORWARD AIR can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in FORWARD AIR will offset losses from the drop in FORWARD AIR's long position.| Cass Information vs. Cintas | Cass Information vs. RELO GROUP INC | Cass Information vs. Superior Plus Corp | Cass Information vs. SIVERS SEMICONDUCTORS AB |
| FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc | FORWARD AIR vs. Apple Inc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Managers module to screen money managers from public funds and ETFs managed around the world.
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